Spain still sunny but clouds gathering

Spain has been in the media for all the wrong reasons because of its economic woes.

We read a Time article on Jerez de la Frontera, Spain’s most indebted city, on the plane on the way over.

It spoke of council employees who haven’t been paid for months, high unemployment and the social and economic problems which come with both of those.

But on the surface, Spain looked much as we remembered it from three previous visits.

We lived in Vejer de la Frontera in 2005 and returned for shorter stays in 2007 and 2008.

Vejer is one of Andalusia’s many pueblo blancos – white villages. It’s perched on top of a hill near the Cape of Trafalgar between Cadiz and Tarifa on the Costa de la Luz and has a population of about 13,000 people.

In 2005 it was booming. The EU was pouring money into highway construction and a big irrigation scheme. British people, put off by soaring prices on the Costa del Sol further east, were making the most of their high pound and Europe’s low interest rates buying and renovating houses.

Now the construction has been finished, the pound has dropped in value, interest rates are higher. There are still tourists on the streets but the boom is over.

Given the dire state of the economy we were expecting obvious signs of problems. At first glance it looked at least as prosperous as we remembered it.

However, the increase in the number of shops, bars and cafes was not a sign of prosperity but of people who had lost jobs trying to run their own businesses.

That extra competition made business tougher but was good for consumers. We thought eating out was cheaper than it had been. That was helped by the difference in the exchange rate. It had cost us about $2.30 to buy a euro seven years ago, now it takes about $1.60; but even euro for euro we thought prices were lower.

The busy season for tourists is a bit later but the town was bustling at the weekend. Our landlady said bookings last year were high but this year Spaniards are taking shorter breaks and competition from the Olympics and European Football championships on top of Europe’s economic woes were resulting in less business this year.

A social security system, family support and a thriving black market are masking the dire situation the country faces but locals told us times are very tough, businesses are struggling and depression and suicide rates are high.